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Elizabeth Farrelly (architecture critic, columnist, author) wrote a compelling article in today’s Sydney Morning Herald on the Tiny House Movement, quoting “the enchanting tataMI house” for “nomadic and mobile futures” designed by Chris L Smith, Min W Dark, Langzi Chiu, and Vesna Trobec (STUDIO TROBEC). With the high cost of housing in Sydney and the tremendous capacity of small spaces, STUDIO TROBEC is particularly interested in the design of small spaces to achieve high quality lifestyles with minimal wastage and thoughtful design.

Just when you thought it was all hard hearts, cold souls and Credlins for Christmas, here’s a little box of light for under your tree. It’s a small box with bright windows, feather-bed, full pantry and concentrated essence of delight. It’s the tiny house movement.

What is a tiny house? Jay Shafer, the designer credited with founding the movement, is a self-designated “claustrophile”. He defines tiny as under 100 square foot (9.3 m²). Then living in an airstream caravan, he has made three houses just as small, but perfectly formed. “The key to designing my happy home,” he writes, “was designing my happy life.” He focuses on detail, year-round comfort and beauty.

Sydney is starting to look like Thatcher’s London, with beggars and street-sleepers poking from every urban orifice. Your standard cardboard box is not good in a downpour, but perhaps the tiny house can help.

It’s an idea that has taken off. One Texas couple built their tiny house for $7000. Others have done it for less, and with less. But cost, all “tiny” practitioners agree, is not the core idea. It’s the freedom of life without the yoke of mortgages and possessions. You could mistake it for a weird mystic cult, except these are ordinary middle-class folk who just want the sense of owning their life, rather than being owned by it.

Could it work? For real? Here? Could people simply take control in this way? With a few thousand dollars and a lot of self-discipline, could we just buck the banking and property system? What shape would capitalism take? And at what point does the tiny house, or micro-apartment, become a slum?

In many ways the tiny house movement is just urbanism re-guised. The smaller your house, the more of your life gets squeezed out into the streets. The tiny house inverts the 20th century’s obsession with big privacy. It reverses the suburban 20-80 public-to-private ratio so that everything you can – meetings, meals, exercise, parties, even work – you do in public.

If architecture is the canvas for the stories of our lives, the tiny house makes most of that painting a collaboration. This is fascinating, and could be the flavour of things to come.

True, contemporary Sydney houses are still the world’s most obese. But if – as futurists rhythmically repeat – young people now want access not ownership, perhaps what “tiny” really signifies is that we’re rediscovering what it means truly to live in a city.

Old Sydney was pretty good at this. We don’t exactly consider Sydney a centre of self-sacrifice. Sydney is emerald city, Sodom-on-sea, symbol of all things hedonic. Yet I’ve always loved how those half-starved, sea-sickened convicts, tossed onto a vast new godforsaken continent, chose to build in a huddle.

They could’ve taken all the space in the world. Could’ve spread to kingdom come. Instead, they created a ruched fabric of tight streets and tighter houses, modelled on the worst slums of Dickens’ London. Of course they had reasons: transport, poverty, habit, government bastardry. Not altruism, certainly. But this intense perversity at the heart of Sydney entrances me.

More charming still is that this same slum huddle is now habitat-of-choice for the well-heeled. Surry Hills is our Greenwich Village: pretentious but still creative. Expensive but still exciting. Inconvenient but yet more sought after than any neighbourhood in Australian history.

Why? People fight and scrabble for Surry Hills not despite its inconvenience, but because of it. The narrow streets, dark houses, un-garaged cars are unbreakably linked to the low-carbon, walkable economy and, more importantly, to a public realm that works as a vast, fluid, shared living space. The spatial riches and personal freedoms that flow, tempt the denizens from their Hunters Hill mansions into what they’d once have termed hovels.

This, simply, is the spirit of urbanism. Old cities took it for granted. Londoners used their local as their living room since Roman times. The suburban century consciously obliterated that knowledge. Now the “tiny” movement – small houses, micro-apartments, nano-living – is bringing it back.

Tiny has many uses. Consider our hopeless struggle against homelessness. Eighty per cent of welfare agencies report being unable to meet demand. Sydney is starting to look like Thatcher’s London, with beggars and street-sleepers poking from every urban orifice. Your standard cardboard box is not good in a downpour, but perhaps the tiny house can help.

In Eugene, Oregon, mayor Kitty Piercy didn’t just shut down the town’s 2011 Occupy encampment in the usual way. She took the opportunity, helped by the arrival in town of young Cincinnati planner Andrew Heben, who had studied “tent city urbanism”, to invent something new.

Informal settlements everywhere, from British gypsies to South African townships, are feared and despised by the good burghers. But Heben had found that these settlements bestow significant benefits; refuge, friendship, freedom and lean, green living.

Mayor Piercy saw the potential. She donated a leasehold acre of land and enough impetus for Heben to scrounge money and materials totalling $200,000. With less than the cost of a single average house, the mini-burb they made offers tiny but safe timber sleeping cottages for 42 of those who have fallen through the American dream. How tiny? Average area: 6m². Major nominated benefit? Communal cooking.

Jay Shafer insists that our habit of “demanding all or nothing from our homes” ensures that the have-nots get nothing at all.

In a similar vein, young Sydney architect Vesna Trobec designed the enchanting tataMI house“for nomadic and mobile futures”. It’s 0.8m wide, has a base area of 4.26m2. With living and sleeping spaces unfolded, tataMI occupies a palatial 13.2m2 – still only 5 per cent of the average, and it can park on a median strip.

Negative gearing, resale habits and bank strictures have all militated against tiny-house takeup in Australia. But this is shifting. Surry Hills architect Tone Wheeler says his smallest micro-apartment to date, enabled by boarding house legislation, is 16m2.

Imagine what it could mean, if most of us spent only $20K-30K on a dwelling. We’d skip in fields of money and time, reclaim our lives, invent wondrous things, do stuff we actually believe in. Who knows, we might even make culture. Small house, lucky country.